In Wake Of Widespread Unemployment Fraud, Tennessee and IRS Garnish Tax Refunds of 17 Thousand

State officials say while getting the money back is important, they're also hammering out ways to prevent fraud up front. Credit John Morgan via Flickr

State officials say while getting the money back is important, they’re also hammering out ways to prevent fraud up front. Credit John Morgan via Flickr

Some 17 thousand Tennesseans who fraudulently took state unemployment benefits saw their federal tax refunds garnished this spring as payback.

The State Department of Labor and Workforce Development says the IRS helped it recover more than $15 million this tax season.  Earlier this spring an audit found the state overpaid roughly five times that amount in benefits, and the department’s commissioner has stepped down.

Overpayments often occur when claimants keep taking unemployment benefits after going back to work.


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